Bryan Caplan

Bastiat in Fairfax?

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The Cost of Accidents... Labor Quality and the Wealth o...

My chairman Don Boudreaux continues to hone his sense of economic ridicule:

If, unlike me, you accept the logic of Ms. Lee's argument that it's wrong to let American consumers buy goods made by workers who toiled under government-regulatory standards that are less strict than those that American workes currently toil under, why limit the restrictions she endorses to other countries? Why not bring in the time dimension as well?

Why not prevent Americans from buying things such as antique furniture or vintage automobiles or houses constructed before World War II?

If the argument against buying things produced by allegedly exploited labor is chiefly a moral one -- an argument that such things are tainted by exploitation and, hence, are unfit morally for human consumption -- then things made in the past by U.S. workers are tainted because workers in the past didn't toil under the same "protections" that workers today toil under.

The same conclusion is reached if the argument rests principally upon the proposition that it's unfair for workers today, whose employers are commanded to offer greater amounts of workplace protection than were employers in the past, to compete with products produced by exploited workers. Why should today's house-construction workers have to compete with houses produced by their exploited brethren of 75 or 100 years ago?

Reading this, I have to conclude that Don Boudreaux is doing more than any other living economist to channel the spirit of Bastiat, the greatest of all economic educators. The Master would be proud.


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TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/593
The author at Club for Growth in a related article titled A Modern Day Bastiat writes:
    I agree with Bryan Caplan. Don Boudreaux may very well be channeling Frederic Bastiat.... [Tracked on November 2, 2006 12:13 PM]
COMMENTS (7 to date)
Ragerz writes:

Wow.

This has to be one of the more pathetic attempts at justifying exploitation that I have ever seen.

Let's consider the two claims here:

(1) "Why not prevent Americans from buying things such as antique furniture or vintage automobiles or houses constructed before World War II?"

Actually, there is a good argument to prevent exactly this. For example, we might consider making the sale of lamp shades made from human skin under Hitler illegal.

But there is at least one major reason not to do this. Administrability. Say one thought this was desirable. Are we going to search everyone's houses and confiscate the things they own for this period? Only when they try to sell it on eBay? Without regard to subsequent attachment of sentimental value to certain objects and heirlooms? Obviously, one could have a moral problem with the consumption of products made in exploitive conditions, but see the moral costs of confiscating long-held property as even higher.

Here is a second point. Causation is often an important element when considering morality. There is a much less plausible linkage between our current use of goods made under exploitive conditions from before World War II and items made closer to the present. No matter what our present consumption patterns, we cannot influence past exploitation. It has already occurred. In contrast, when you buy goods from institutions engaged in exploitation in the present, you are subsidizing and enabling their activities. That is, you along with other consumers are a cause of the exploitation. But for your willingness to buy such products produced under such conditions, the conditions would not continue. In contrast, the market for goods made before WWII has no important impact in terms of subsidizing exploitation.

(2) "Why should today's house-construction workers have to compete with houses produced by their exploited brethren of 75 or 100 years ago?"

Why not? Do you think that a house built 75 to 100 years ago is a very good substitute for a house built today? Probably not without major renovation. I have no problem letting builders compete with old houses; I think they will do just fine with improved technology and modern building methods.

Second, these houses do not really "compete" with current construction. New houses are built because they are needed. Presumably, they are needed despite the existence of these older houses. What we are concerned about is that competition will either (1) create a race to the bottom in working conditions or (2) lead to massive unemployment, to the extent that one group is prevented from joining the race to the bottom, while another group is allowed. The existence of old homes does not really create a race to the bottom, because such a race is prohibited by laws regulating working conditions. They don't lead to massive unemployment in the construction industry either, because many individuals want the features and convenience and superior design of newer homes built with newer technology and because quantitatively, there are not enough of these older houses around.

So lets review. Don has fallen flat on his face in a pathetic attempt to justify exploitive labor conditions by reference to temporal competition. The bottom-line with respect to morality is that if you knowingly purchase goods produced in exploitive environments, you are morally implicated because you are subsidizing those environments. The bottom-line with respect to whether it is "unfair" to expose current workers to competition from old products, we have no reason to think that old products are necessarily good substitutes for new products and we have no reason to think that competition with those products will lead to a race to the bottom.

Overall, Don's argument is a classic strawman argument. Something that I frankly think should be below the chair of GMU's economics department. He implies that to be consistent, those who have a moral problem with exploitation, must treat temporal competition the same as geographic competition. But as has been shown, this is simply not true. Maybe Don should think before he blogs, because it is not very difficult to produce compelling reasons to treat temporal and geographic situations differently. In general, if you think you have an argument that the other side must engage in absurd and impractical policy measures in order to be consistent, that is usually an indication that you should think about those arguments more carefully, not spew out the first thoughts that come to your mind. Logical consistency does not in fact require that two different things be treated in a like manner.

Cyrus writes:

He implies that to be consistent, those who have a moral problem with exploitation, must treat temporal competition the same as geographic competition.

Untrue. The argument does not equate temporal competition with geographic competition in general. It specifically addresses the claim that exploitation produces some moral quality that inheres in the goods themselves.

If one argues the exploitatively-produced good should be banned because admitting it encourages exploitation, one need not worry about past goods, because their present salability does not affect the incentives of present-day would-be exploiters. But if one argues that the exploitatively-produced good is inherently inferior, then it does not matter where or when it was produced.

Matt writes:

This is pretty bad for an economist. Assuming the most generous possible reading of the "moral" argument against buying exploited labor, the point is that the purchase creates incentives to maintain said labor standards. That is obviously not a concern when dealing with the temporal aspect.

Boudreaux is kind of an idiot. Or else a demagogue. Neither befitting an object of praise, if you ask me

Ragerz writes:

Cyrus,

First of all, the argument you suggest that Don is making is addressed by my point about administrability I made above.

Second, it is unambigiously clear that Don's argument has greater scope than you are suggesting. Read the whole thing here. (Caplan also has conveniently linked to it in his original post.)

One argument by opponents that Don unambigiously attempts to address is concerns about reduction in demand caused by competition with products produced under exploitive working conditions and also the pressure that such competition puts on governments to reduce their standards. Clearly, Don is not merely trying to combat an argument about "some moral quality that inheres in the goods themselves."

To sum it up. Even if Don's argument had the limited scope you suggest, it would still be a very poor argument due to administrability concerns. However, it has a much larger scope than you suggest, which is clear if you read it. Overall, Don has made a pathetic argument indeed.

Seth writes:

I had the same reaction as Matt and Ragerz. I don't know anything about Boudreaux, so I can't speak to Matt's characterization of him, but the clip posted above reads more like college-sophomore sarcasm than something befitting a faculty member.

Carl Marks writes:

the problem with Mr. Boudreaux's post is that he is attacking it from the wrong angle. It would have been better to tackle the idea of exploitation and what regulation is supposed to do.

If a worker volunteers to join a company and provide labor, then we should not question the terms of the contract that he has entered. How are we to assess whether the conditions are poor are not. Maybe our worker prefers poor conditions and higher wage to lower wage and better conditions.
If it were true that a sufficient amount of employees preferred better conditions to higher wages, then a chance at profit could arrise for an entrepreneur. And we should not assume that such an opportunity has not already been created. There are jobs with varying conditions in Mexico (my father in law owns a small fabrica so I hae been able to whitness this. The workers have a choice of what they would prefer.

Of course it would make us all feel good to know that everyone enjoyed a comfortable living and was well-paid, but the fact is that some people cannot be profitably employed at high pay levels. What our union friend here is advocated higher payment for workers who it isn't profitable to pay high wages to. This then is really a cover-up at limited jobs in other countries in order to protect union workers, which is a really disgusting thing, as many of these people are desperately searching for an improvement of their standard of living.

If some people find the idea that these workers make low wages then they should donate to charity to help them. This directly improves the standard of living of these people while minimizing impact on the labor market and thier opportunuties for future employment.

spencerS writes:

Yes,Don Boudreaux, the man who makes a big deal of the fact that there have been big changes in the quality of automobiles ove the last 20-40 years and claims the cpi understate inflation because of this. But, of the other hand does not even know that the BLS adjust the cpi for changes in the quality of autos. L have never seen another PhD. economist so ignorant of what the facts actually say as him.

It must be great to get the taxpaper to support you living in a complete fanatasy world.

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